CANADA FX DEBT-Canadian dollar drops off 3-week high as greenback stabilizes

    * Canadian dollar falls 0.2% against the greenback
    * Loonie hits strongest intraday since Sept. 12 at 1.3207
    * Price of U.S. oil decreases 0.1%
    * Canadian bond prices rise across steeper yield curve

    TORONTO, Oct 2 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Wednesday, pulling back from a
near three-week high earlier in the session, as the greenback
steadied following disappointing U.S. manufacturing data a day
    At 9:25 a.m. (1325 GMT), the Canadian dollar          was
trading 0.2% lower at 1.3250 to the greenback, or 75.47 U.S.
cents. The currency touched its strongest intraday level since
Sept. 12 at 1.3207.
    The U.S. dollar        edged higher against a basket of
major currencies after data on Tuesday showing a shock
contraction in U.S. manufacturing activity knocked it off
two-year highs.             
    The U.S. manufacturing data confirmed that the domestic
economy was feeling the burn from a prolonged trade war between
the United States and China.
    The Bank of Canada has worried that the U.S.-China trade
conflict is weighing more heavily on the global economy, but has
showed no appetite for cutting rates amid steady domestic
    Canada's trade report for August is due on Friday, which
could help guide expectations for the central bank's interest
rate outlook.
    The price of oil, one of Canada's major exports, gave up its
earlier gains as depressed global markets offset industry data
showing a surprise drop in U.S. crude inventories. U.S. crude
oil futures        were down 0.1% at $53.55 a barrel.
    Canadian government bond prices were higher across a steeper
yield curve in sympathy with U.S. Treasuries. The two-year
           rose 6 Canadian cents to yield 1.50% and the 10-year
            was up 17 Canadian cents to yield 1.334%.    

 (Reporting by Fergal Smith; Editing by Bernadette Baum)